The City Club Hotel, a former gentlemen's club built in 1904, is considered one of the hidden gems of the New York hotel market, a place where celebrities and other sophisticated travelers stay, because of its relatively low profile. The hotel is located in a prime location between Fifth and Sixth avenues, and is the home to chef Daniel Boulud's DB Bistro Moderne.

Jared Kelso, senior director at Cushman & Wakefield, said that Starwood Property's background in the hospitality business allowed them to structure a complex deal in about three weeks, where more traditional lenders would have taken a pass.

"There are a lot of lenders that can claim to understand the New York City market, but there are very few who can claim to understand the intricacies of hotel ownership," said Kelso, who represented the City Club owners. "They got the story."

Ben Thypin, senior market analyst at Real Capital Analytics, agreed that Starwood may be uniquely able to structure more complex loan deals in the current hotel market.

"It seems to me they're concentrating on the type of opportunities a more conventional lender would be less willing to do," said Thypin, noting that they seem to be willing to lend on riskier deals that others might not take a chance on.

Despite the success of his new venture, Sternlicht remains concerned about the pace of the market and warns of a debt bubble.

"I was seeing deals where the debt was more than what I was willing to pay for the assets," Sternlicht said.

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Ben Carlos Thypin

I am currently the co-founder of Quantierra, the world's first data driven real estate brokerage and investment manager. In my former life as Director of Market Analysis at Real Capital Analytics, I worked with press outlets large and small to provide them with great data and insightful commentary. Here are some of the results of this collaboration. For the rest, please check out the News Archive.